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Serwer's picks: Delta, Dreams, and Case
Potential for an airline and a moviemaker. Meanwhile, Time Warner needs to solve a riddle.
December 12, 2005: 8:35 AM EST
By Andy Serwer, Fortune Editor-at-Large

NEW YORK ( - Looking for some stock inspiration for Monday? Here's three items worth considering ...

AIRLINE TAKEOFF... Some progress is made by Delta Airlines and its embattled pilot's union. They reached a tentative, interim deal. Well, better than nothing. The big news is for everyone flying over the holidays---no strike! The two sides hope to reach a comprehensive settlement by March 1. ... Meanwhile, did you notice? The only one of the big three not in bankruptcy, American Airlines (United of course is in chapter 11 and has been forever) has been lifting off. At least its stock has, climbing from single digits to $19 over the past year. Why? Falling energy prices. Its stock chart is the inverse of an oil chart. Price of oil goes up, short airline stocks. Goes down, buy 'em. Bet there is still some more upside to AMR (Research).

DREAM DEAL FOR PARAMOUNT: The Viacom unit is buying Dreamworks live action business for $1.6 billion, stealing it from under the nose of NBC Universal. What does Paramount get, if they're selling off the Dreamworks' film library? I spoke with a banker on the deal over the weekend, and he reminded me that Paramount now gets to distribute Dreamworks Animated films (that company remains an independently public traded entity.) As in Shrek. Ahhhh! Also this deal allows Jeffrey Katzenberg to focus exclusively on animation, which he loves... DWA (Research) is in recovery mode now. Kind of a cheap stock. Worth a look?

A TURNABOUT: Steve Case, the man who built AOL and the architect behind the AOL/Time Warner merger, now thinks the deal should be undone. He writes in the Washington Post: "Given that Time Warner failed to capitalize on AOL's potential..." Whoa! Stop right there. Hey Steve let's just say there are other ways of interpreting those problems! As far as Case's idea of breaking TWX into four parts ... AOL, the magazine company, cable and entertainment (TV and movies) ... I don't necessarily disagree, but the stock market doesn't seem too excited by that prospect. The real issue for TWX (Research): figuring out how to distribute copyrighted material in a digital world. I say the stock doesn't really move until they figure out that riddle.  Top of page

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